Washington State is on the verge of a major tax shift. Beginning in 2028, a new “millionaires tax” will apply to the state’s highest earners—marking a significant change for a state long known for having no income tax.
But one of the clearest ways to understand how this tax works isn’t through traditional taxpayers—it’s through professional athletes.
Because athletes deal with taxes across multiple states every season, they provide a useful real-world example of how Washington’s new tax will function for all millionaires.
What Is Washington’s Millionaires Tax?
Starting January 1, 2028, Washington will impose a 9.9% tax on income above $1 million.
If you earn:
- $900,000 → no state income tax
- $1.5 million → tax applies only to the $500,000 above $1 million
This structure makes it a marginal tax, not a flat tax on total income.
For high earners—business owners, executives, investors, and yes, athletes—this means Washington will now function more like traditional income-tax states at the top end.
Why Use Pro Athletes to Explain It?
Professional athletes are essentially “portable millionaires.”
They:
- Earn well above $1 million annually
- Work across multiple states
- Have income split between home and away games
- Regularly compare tax environments when choosing where to live and work
Because of this, they already navigate something known as the “jock tax.”
What Is the Jock Tax?
The “jock tax” refers to the way states tax athletes based on where games are played.
For example:
- A Seattle Seahawks player pays taxes in California when playing the 49ers
- A Texas Rangers player pays taxes in New York when playing the Yankees
Each state taxes the portion of income earned there.
But here’s the key point:
An athlete’s home state still determines the largest share of their tax burden.
And that’s exactly where Washington’s new law comes into play.
How the New Tax Works — Through a Sports Example
Let’s take a simplified example:
A player earns $10 million per year and plays for a Seattle team.
Before 2028:
- No Washington state income tax on salary
- Only pays “jock taxes” in other states
After 2028:
- Washington taxes income above $1 million at 9.9%
- Roughly $9 million becomes taxable
- State tax liability ≈ $891,000
That’s nearly a $1 million annual difference, just from the change in Washington law.
Now apply that same logic to:
- CEOs
- Law firm partners
- Business owners
- Investors with large realized income
- Tech workers
The mechanics are identical.
The Bigger Insight: This Isn’t Just About Athletes
Athletes make the math visible, but the policy applies broadly.
Anyone earning over $1 million in Washington will now face:
- A marginal tax on top-end income
- A new incentive to consider residency and timing of income
- Greater alignment with high-income tax structures in other states
In other words, Washington is moving from:
“No income tax”
to
“No tax for most—but a meaningful tax for top earners”
Why Location Still Matters
Athletes also highlight another important concept: location affects take-home income.
Seven states still have no income tax at all:
- Alaska
- Florida
- Texas
- Nevada
- South Dakota
- Tennessee
- Wyoming
These states host a significant number of pro teams, including:
NFL
Miami Dolphins, Tampa Bay Buccaneers, Jacksonville Jaguars
Dallas Cowboys, Houston Texans
Tennessee Titans
Las Vegas Raiders
NBA
Miami Heat, Orlando Magic
Dallas Mavericks, Houston Rockets, San Antonio Spurs
MLB
Miami Marlins, Tampa Bay Rays
Texas Rangers, Houston Astros
NHL
Florida Panthers, Tampa Bay Lightning
Vegas Golden Knights
Dallas Stars
For athletes, choosing between teams in different states can mean millions in after-tax income differences.
The same principle applies—less visibly—to other high earners deciding where to live or realize income.
Will This Change Behavior?
The answer is: sometimes, but not always.
Athletes don’t choose teams based on taxes alone. They also weigh:
- Championship potential
- Market size and endorsements
- Family and lifestyle
- Team culture
Similarly, non-athlete millionaires consider:
- Business opportunities
- Quality of life
- Proximity to clients or investments
But when income reaches a certain level, taxes become harder to ignore.
What Makes Washington Different
Even with this new law, Washington remains unique:
- No tax on income below $1 million
- No broad-based income tax for most residents
- A highly targeted tax affecting a small percentage of households
This creates a hybrid system:
- Low-tax environment for the majority
- Progressive taxation at the very top
How Deductions Factor In (Including Charitable Giving)
Now let’s add a layer that applies to both athletes and non-athletes: charitable deductions.
The deduction is capped at $100,000 of charitable contributions per tax year. Donations exceeding this amount are not deductible for state purposes.
Assume a player (or any Washington high earner) makes a $100,000 charitable contribution in a given year.
If that deduction reduces taxable income above the $1 million threshold:
- Original taxable amount above $1M: $9,000,000
- Less charitable deduction: $100,000
- New taxable amount: $8,900,000
At a 9.9% rate:
- Tax savings = $9,900
Bottom Line
Using pro athletes as a lens helps clarify what Washington’s millionaires tax actually does.
It doesn’t tax everyone.
It doesn’t apply to all income.
Instead, it introduces a targeted, marginal tax on high earners—similar to what athletes already experience across state lines.
The difference is that, starting in 2028, Washington will no longer be the exception.
For the state’s millionaires—whether they’re on the field or in the boardroom—that’s a meaningful change in the financial playbook.
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